Companies Merging To Build US$220M Live Music Venue in Texas

Fresh Vine Wine Inc.'s (VINE:NYSE American) merger partner, Notes Live Inc., is in the process of developing its largest venue to date, a US$220 million (US$220M), 20,000 person-capacity, open-air amphitheater in McKinney, Texas, as announced in a recent news release.

"Called the Sunset Amphitheater, it will put McKinney on the map as a prime touring destination for the biggest national acts coming through the south, and it will also set a new standard for what Texas music venues can be," the release noted.

Fresh Vine Wine, a North Carolina-based producer and seller of lower-carb, lower-calorie wines, is in the process of acquiring Notes Live, a live music and entertainment venue developer based in Colorado. Both entities entered into a definitive merger agreement in late January 2024, as announced in a January news release, and the closing of the deal is to happen this June.

Ground for the new venue was broken in 2023, construction is slated to start later this year, and the grand opening is scheduled for August 9, 2026. Marking the debut will be a concert put on by local favorites, three-time Grammy winner Ryan Tedder and his Grammy-nominated band OneRepublic. Tickets for this future event have already sold out.

Coming up for Fresh Vine Wine is the closing, in June 2024, of its acquisition of Notes Live. 

The Sunset Amphitheater in McKinney, 30 miles north of Dallas, will be constructed on 46 acres and be modeled after Notes Live's entertainment campus in Colorado Springs, which also boasts an amphitheater with the same name.

At the Sunset in McKinney, "every seat will be comfortable with a direct sightline to the stage, the sound will be crystal clear, the food and drinks will be gourmet (not your typical concert fare), and the views when the sun is setting over the stage will be breathtaking," the March release explained.

The venue will feature about 250 luxury fire pit suites in four different sizes, each seating four to ten guests. These will replace the seating traditionally seen in an amphitheater's mid and lower bowl areas. Other seating options will be custom-built Owners Club suites and an expansive grassy area.

"Win-Win Public-Private Partnership"

Once the merger of Fresh Vine Wines and Notes Live closes, Fresh Vine will change its name to Notes Live Holdings Inc., and the NYSE American ticker symbol will become VENU, if approved by the exchange. Also, Notes Live's founder, JW Roth, will become the president and chief executive officer (CEO) of the combined company.

"The team at Fresh Vine Wine couldn't be more excited about the opportunity to partner with Notes Live on what we expect will be an incredible journey to become one of the leading live entertainment companies in the world," Fresh Vine President and CEO Mike Pruitt said in the January release. "It's a win-win public-private partnership."

The new entity will no longer make wine, as Fresh Vine is to wind down these operations before the merger closing, as noted in a February news release. Instead, the combined company will continue developing premium venues and ramp up another line of business, purchasing suites at various venues and renting them out during events.

To put in perspective the potential of such a revenue stream, sales of the 133 fire pit suites at Notes Live's existing Colorado Springs venue, US$200,000–500,000 apiece, generated US$33M. All suites sold in only 14 weeks.

Pre-sales are to start soon for the fire pit and larger corporate suites to be built at the Sunset Amphitheater in McKinney, according to a Venues Now article. Prices will range from US$295,000–875,000. Already, people have reserved suites to buy, the total dollar amount of which is up to US$5 million so far.

To put in perspective the potential of such a revenue stream, sales of the 133 fire pit suites at Notes Live's existing Colorado Springs venue, US$200,000–500,000 apiece, generated US$33M. All suites sold in only 14 weeks.

Notes Live identifies markets in regions with a growing population and without a high-quality music and entertainment venue, then swoops in and develops such a place, thereby meeting the need, the company said. In the last 12 months, it opened a new venue in Gainesville, Ga., and announced plans to develop music and entertainment destinations in Murfreesboro, Tenn., and in Broken Arrow and Oklahoma City, Okla. Notes Live's goal is to be running its own venues in 12 markets by 2028.

Popular Pastime in the U.S.

The music events market in the U.S. is forecasted to reach US$16.98 billion (US$16.98B) in revenue this year, according to Statista. By 2028, revenue is expected to hit US$18.32B, expanding in the interim at a 1.92% compound annual growth rate (CAGR).

The report indicates that people in the States enjoy attending music events as a whole. Their popularity has been and continues to be driven in large part by the fact that the country, with its rich, diverse music history, encompasses genres and artists catering to every possible taste.

"Additionally, the rise of social media and online streaming platforms has made it easier for people to discover and follow their favorite artists, further fueling the demand for live music experiences," notes the report.

Similarly, the global music events market is expected to grow in the next few years, Statista indicates in a different forecast. The research firm predicts revenue in this market will increase at a 2.12% CAGR to US$37.22B by 2028, up from US$34.23B in 2024.

The Catalyst: Day One as Combined Co.

Coming up for Fresh Vine Wine is the closing, in June 2024, of its acquisition of Notes Live. This milestone event could boost its stock.

Subsequently, another possible catalyst, this one for the combined company, will be the construction start of the Sunset Amphitheater in McKinney, which will happen sometime later this year.

Ownership and Share Structure

According to Reuters, the ownership of Fresh Vine Wine breaks down as follows. Management and insiders own 47.41%, or 7.57 million (7.57M) shares, of Fresh Vine Wine.

The Top 5 strategic investors, which are the Top 4 overall, are Oakridge, with 20% of the stock, President and Head of Sales Development Rick Nechio with 9.85% or 1.57M shares, Hollywood stars Nina Dobrev with 9.08% or 1.45M shares and Julianne Hough with 7.56% or 1.21M shares, and Stephen Apolant with 5.48% or 0.88M shares.

As for institutional ownership, it amounts to 1.61% or 0.26M shares. Of the 14 institutions with shares, the three with the most are Renaissance Technologies LLC with 0.42% or 0.07M shares, Brookstone Capital Management LLC with 0.33% or 0.05M shares, and Newbridge Capital Management with 0.27% or 0.04M shares.

Retail investors own the remaining 50.98% of Fresh Vine Wine.

In terms of share structure, the company has 15.98M outstanding shares and 8.4M free float traded shares.

Fresh Vine's market cap is US$12.13M, and its 52-week trading range is US$0.21–$1.06 per share.

All of this will be subject to change once the acquisition is closed. 

Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Fresh Vine Wine Inc.
2. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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